Trading costs
Everything you pay to trade: commissions, the spread between the buying and selling price, and for shorts, borrowing fees.
In plain English
Even with 'zero commission' brokers, you pay the spread: the gap between the price you can buy at and the price you can sell at. You lose it every time you trade.
Uncle Gary explains
Airport currency exchange: buy euros, change your mind five minutes later, sell them back, and you have fewer dollars than you started with. Nothing moved. That is the spread.
Why it matters for your money
Plenty of strategies look profitable on paper and lose once costs are included. We always include them.
Where we tested it
- Does the Golden Cross Work? We Tested 72 Strategies
- Does Volume Confirm the Trend? Sometimes It Contradicts It
- Lesson 9: Between Two and Six Pints: Confidence Intervals
- Should You Buy Stocks After Good Earnings? Post-Earnings Drift, Tested
Related terms
All glossary terms. Educational content, not financial advice.